The Latte Factor for Businesses

Over the past week we’ve talked about 2 ways to provide a revenue boost to your business…

1. Go back and re-run you most successful promotion from the past year

2. Implement a strategy to increase your average order value (AOV)

Now, let’s jump into one more…

Picture this. You stop by your favorite coffee shop every morning, spending $5 (or more) on that perfectly brewed cup.Harmless, right?

But over the course of a year, that $5 can quickly turn into a few hundred dollars.

Over the span of a few years – after you add in an occasional breakfast sandwich or muffin once (or twice) a week…

Suddenly you’ve dropped over $1,000 on this “small” pleasure.

Personal finance author David Bach wrote a book about this called The Latte Factor, coming at it from the side of how much it could impact your retirement if you invested that money over time instead.

But let’s look at it from the business side.

Imagine if every one of your clients and customers was doing the same with your business—coming back again and again, occasionally adding more items to their cart.

The more cart items goes to the concept of average order value (AOV) we talked about last week.

But the latte factor is a perfect example of Customer Lifetime Value (CLTV) in action, and it can unlock serious liquidity for your business.

The common misconception?

Many businesses think growth and greater liquidity is all about acquiring new customers.

But here’s the truth… real, sustainable liquidity often comes from increasing the value of your existing customers.

Not only that, but the cost to acquire new customers is much higher than the cost to simply sell more to the ones you already have.

So, how can focusing on CLTV transform your revenue strategy and give you more financial breathing room?

Proven Strategies to Boost CLTV (and Your Revenue)

Here are a few strategies to think about when it comes to CLTV.

If you’re missing one or more of these in your business, it might be time to sit down and take a closer look.

Strategic Client Retainer Models

Much like recurring revenue from a subscription, retainer models provide consistent, predictable cash flow.

For professional service firms, securing long-term retainers with clients transforms sporadic project-based revenue into steady income that improves CLTV and provides liquidity for growth.

High-Touch Client Service

Excellent service can be the difference between one-time engagements and lifelong client relationships.

Personalized, high-touch service (like offering a dedicated point of contact or expedited responses) builds trust and encourages long-term loyalty, increasing both CLTV and cross-referral opportunities.

Client Education and Thought Leadership

Educating clients through webinars, white papers, or industry reports not only positions you as a trusted expert but also keeps clients engaged long-term.

By continuously offering valuable insights, you create deeper loyalty and long-term business partnerships, boosting CLTV and referrals.

Customer Service Is Your Hidden Profit Center

Happy customers are repeat customers.

Going the extra mile in customer service doesn’t just bring people back; it also makes them advocates who bring new customers along for the ride—without the heavy cost of acquisition.

Engagement Builds Lifelong Value

Regular communication, whether through newsletters or personalized offers, keeps customers coming back.

Staying top of mind turns occasional buyers into lifelong supporters, increasing both CLTV and your cash reserves over time.

Delivering On Your Promises

Finally, we come to the most important one –  delivering what customers are expecting from you. If you’re the coffee shop above, it’s a combination of great food and coffee mixed with a pleasant environment and excellent team. If you’re a service provider or you sell goods, it’s all about the buyer experience and the quality of what the customer receives.

That simple cup of coffee is more than just a daily routine; it’s a lesson in customer value.

By nurturing and maximizing the potential of your existing customers, you can unlock a steady stream of revenue—and liquidity.

Not only that, but because the cost to acquire the customer is already baked in, it increases your profit margin over time.

Here’s one problem though…

Far too many companies don’t even know or track their CLTV.

Starbuck’s has the data and has done the math — their average customer value is a staggering $14,099!

So step 1 is to look at your business and see if you know this number in the first place.

Then, what steps can you take today to ensure your customers keep coming back for more?

Jon & Chris

P.S. We’ve covered three different ways to quickly grow your revenue over the past week. Ready for us to dive into your business and figure out where to start? Just connect with us here, tell us a little about your business and let’s talk.